With the wealth management space in the midst of a (not so) subtle revolution, more Advisors than ever are ready to make a change to an independent RIA.
This move can bring much greater independence, flexibility, and control over your practice — but due diligence is essential for a decision that could reshape your career and client relationships for years to come.
The key to a successful transition lies in asking the right questions upfront and conducting thorough due diligence on potential RIA partners.
This comprehensive checklist from the senior consultants at TERRANA GROUP will guide you through the inquiries that will separate exceptional RIA partnerships from mediocre ones.
The Shifting Sands of Financial Advice: Why Independent RIAs?
Advisors are increasingly weary of the constraints imposed by legacy infrastructure, administrative burdens, and revenue-sharing models that often feel disproportionate to the value they deliver.
The sheer growth in SEC-registered advisory firms — from 16,000 in 2023 to 18,700 in 2024, according to Cerulli Associates — underscores this trend. This expansion, while indicative of a vibrant market, also necessitates a meticulous approach to partner selection.
In addition, independent RIAs offer a refreshing alternative: streamlined operations, ultra-modern technology, and a culture that truly values Advisor success.
The most successful transitions occur when potential partners are thoroughly evaluated across multiple dimensions rather than focusing solely on compensation structures or immediate financial incentives.
Core Questions to Ask
Perhaps the most important aspect to consider is how an IRIA aligns with your values, goals, and vision for the future. It’s the foundation of your ability to scale, attract and retain clients, and run your business on your terms.
While many RIA firms tout their “independent” culture, look deeper into the foundation behind the façade.
Flexibility and Operational Compatibility
How does the RIA’s compliance framework align with my current business needs and future growth vision?
A lax approach can expose you to undue risk, while a firm that’s too controlling can gate-keep your potential.
Seek an RIA that demonstrates a clear understanding of regulatory requirements while also embracing an Advisor-friendly, supportive compliance culture. Evaluate how their internal processes streamline compliance tasks, rather than adding layers of bureaucracy.
Does the RIA offer solutions for managing legacy commission-based business, and how transparent are those options?
Many advisors transitioning from broker-dealers have existing commission business. Some RIAs offer solutions to manage these assets, potentially through an affiliated broker-dealer or by facilitating the sale of commission trails.
Be wary of arrangements where the RIA or a third party could attempt to solicit your advisory assets behind your back. Prioritize a path that allows you to maintain full client relationships and control.
How does the RIA assess and support diverse revenue streams and service models?
A truly flexible RIA partner will understand and accommodate various client service models (AUM-based, financial planning fees, hourly consulting) and diverse revenue streams.
Look for an opportunity that doesn’t try to force your practice into a pre-defined mold, but rather empowers you to continue serving your clients in the way that best suits their needs and your expertise.
What’s the True Ownership Structure — and Where Do You Fit In?
For many advisors, the decision to partner with an independent RIA isn’t just about the next few years. It’s about long-term ownership, succession planning, and equity value. Not all ownership structures are created equal.
Ask these forward-thinking questions:
- Is the firm founder-owned, partner-owned, or private equity-backed?
- Is there an equity path for new Advisors?
- How are buy-ins and exits handled?
Founder-led or team-owned firms often appeal to wealth management professionals seeking a more collaborative culture and long-term stability.
Conversely, private equity-backed firms may offer quick capital and scalability, but they often come with intense timelines for monetization and a relentless pursuit of profitability over everything else.
Understanding the firm’s vision and your potential place within it can help you avoid cultural or strategic misalignment down the road.
Cutting-Edge Custodians, Support, and Advice Tech
Real success comes from having the resources you need at your fingertips.
Which custodial relationships do you maintain, and what are the associated costs?
Custodial relationships directly impact your clients’ experience and your practice economics.
Delve into the RIA’s custodial partnerships and whether they pass through institutional pricing advantages to Advisors. Clear communication on breakpoints and how they benefit your practice is essential for long-term profitability.
What technology platforms do you utilize, and how do they integrate?
Modern investors absolutely require seamless technology integration.
Your potential RIA partner should offer comprehensive CRM systems, portfolio management tools, an accessible digital portal, and client communication platforms that work together holistically.
Ask for demonstrations of their tech stack and inquire about all available analytics tools, recent upgrades, and planned enhancements.
How do you handle business development, marketing, and administrative support?
Growth-oriented industry professionals need partners who can support their expansion efforts. Inquire about marketing resources, referral programs, center of influence relationships, and business development coaching.
Some RIAs provide built-in marketing, while others expect you to handle these activities yourself. Digital marketing best practices change rapidly, and what’s effective today can be a dud tomorrow.
For some Advisors, the thought of handling mundane back-office tasks is enough to keep them in thrall to the wirehouse. The best independent RIAs will have a talented and agile support team.
Empowering Growth With the Right Partner
One of the most significant hurdles to overcome when considering a change of this magnitude is the “fear gap.” The anxiety around making such a massive transition can often be paralyzing, even for the most entrepreneurial-minded Advisors.
However, the senior consultants of TERRANA GROUP are here to offer invaluable guidance and access to a rock-solid and far-reaching network. One of our biggest strengths is building powerful relationships.
For 33 years, we’ve helped Advisors find their North Star and cultivate true fulfillment. Let’s start the conversation today!
